Costello joins Coonan in warning to Telstra

Federal Treasurer Peter Costello has joined IT Minister Senator Helen Coonan in a warning to Telstra executives that they should get on with the job of running the telco, instead of focusing on industry regulation.

Costello said Telstra management needs to stick to the business of running the company and to leave the issue of industry regulation to the government.

"The government's obligation is to ensure there is a competitive framework, that the ownership is resolved [and] to determine what happens to the proceeds," he told reporters in Melbourne on Friday.

"Those are matters for the government, the matters for the directors are to run the company and to preserve value and increase value for shareholders." Earlier in the week Senator Coonan told Telstra executives to stop whinging about Australia's regulatory environment.

Referring to the new American team at Telstra headed by CEO Sol Trujillo, Coonan said Telstra executives need to get on with the operational side of the job and stop complaining about regulation.

Costello again reinforced the government's firm position on Telstra regulation, saying the regulatory system was designed to promote competition. "Telstra has to work within that; I wouldn't want to see a less competitive regime than we currently have," he said.

His response follows a warning from Telstra executive Phil Burgess that Telstra's share price could plummet because of the government's refusal to ease regulation and competition laws.

Costello admitted Telstra was in a difficult position with 51.8 percent of the telco owned by government.

"They are in a very difficult conflict situation; it has to be resolved one way or another," he said.

Legislation to sell the government's remaining share of Telstra will go to parliament this week.

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